City withholds $50K from airport purchase

“The city withheld moneys as a result of numerous issues that were discovered as part of the Transport Canada audit.” - David Perehudoff

Following a 2014 Transport Canada audit, the City of Trail wound up paying $50,502 under the sale price for the Trail Regional Airport.

That’s about four per cent off the $1.28 million price tag that came with the city’s deal to buy the Highway 22A air strip from the Regional District of Kootenay Boundary (RDKB) last year.

The final payment, $640,000, was payable to the RDKB last August. The city held back funds after the Process Validation Inspection (PVI) findings, better known as an audit, were released in March and called for a corrective plan to fix compliance infractions.

“The city withheld moneys as a result of numerous issues that were discovered as part of the Transport Canada audit,” confirmed David Perehudoff, Trail’s chief administrative officer (CAO).

“The city did not believe it was reasonable for the city to absorb the costs to correct numerous deficiencies that brought the Operating Certificate into jeopardy,” he explained, adding the buyer expectation was that the airport was fully compliant with mandated regulations.

The audit inspection was not a condition of the purchase agreement.

“A condition in the agreement noted that the RDKB was in compliance with all licences and permits required to operate an airport,” Perehudoff added.

“On receipt of the PVI results, it was very clear the airport was not being operated in compliance with the Operating Certificate issued by Transport Canada, and that remedial work had to be done.”

The RDKB board directors reviewed the matter in an April 30 closed meeting, and agreed to a resolution that no action be taken regarding the City of Trail withholding $50,000 in the sale of the airport.

“The deal/transaction is complete,” confirmed John MacLean, CAO for the regional district. “The city withheld funds for what they deemed to be deficiencies (and) the board decided to take no action as to whether the withholdings were proper.”

Since the audit, the city has work diligently to address all issues identified, said Perehudoff.

“We have been in constant contact with Transport Canada as part of going through the many issues that were brought forward.”

Three “moderate” cases and one “major” finding came up in the inspection. Among these, the report concluded the need of renewing an expired offset approach surface agreement; that a recent runway construction project was not done to compliance and that training and daily practices and procedures were not being recorded.

Perehudoff confirmed if an action plan hadn’t been developed following the PVI, the civic airport was at risk of losing its operating certification.

The runway and fence presented significant issues, and while the city held back money to re-mark the runway, the latter was known prior to the sale and not included in the claim.

“There is now a fully compliant fence around the airport property for which the city spent in the order of $160,000,” said Perehudoff.

Deficiencies in ground staff training, hazard inventory and runway obstacle identification and remediation were additional problems the city addressed.

Trail Regional Airport was last inspected in 2008, and since that time Transport Canada’s focus has been implementation of Safety Management Systems.

The federal body does not conduct inspections every time an airport is sold, but does consider ownership and managerial changes as factors in determining inspection priorities and schedules.

Under the regional district’s ownership, the airport service, which includes two scheduled commercial flights daily, was volunteer-run.

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